PC Connection (PCC) AI Stock Analysis

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PC Connection

(Frankfurt:PCC)

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Positive Factors

Broad-Based Revenue and Earnings GrowthRecord sales and earnings growth across major product categories and customer segments indicate strong demand and effective execution. Broad-based expansion reduces reliance on a single offering, while improved operating leverage supports continued earnings growth as revenue scales.

Negative Factors

Negative Operating and Free Cash FlowThe shift to negative operating and free cash flow is a meaningful durability concern despite reported profitability. If working-capital needs remain elevated, cash conversion could constrain internally funded investment, dividends, or repurchases and increase dependence on balance-sheet liquidity.

PC Connection (PCC) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 2.21B
Dividend Yield: 0.86%
Average Volume (3M): 50
Price to Earnings (P/E): 21.6
Beta (1Y): 0.40
Revenue Growth: 4.13%
EPS Growth: 19.75%
Country: Germany
Employees: 2,525
Sector: Technology
Sector Strength: 61
Industry: Technology Distributors

PC Connection Business Overview & Revenue Model

Company Description

PC Connection, Inc., together with its affiliates, offers a comprehensive range of information technology (IT) solutions. The company structures its operations into three main divisions: Business Solutions, Enterprise Solutions, and Public Sector Sol...

PC Connection Earnings Call Summary

Earnings Call Date:Oct 27, 2026(Q3-2026)|% Change Since:-1.31%|Next Earnings Date:Feb 09, 2027

Earnings Call SentimentPositive

The call was strongly positive, supported by record net sales, gross billings and gross profit, double-digit growth across major segments and verticals, improved operating leverage, record adjusted EBITDA, strong backlog and liquidity, and continued AI-related demand. Offsetting concerns included gross-margin pressure, operating cash use from working-capital investments, slower public-sector growth, an expected 3% or 4% sequential fourth-quarter decline, no anticipated budget flush, and the expectation that endpoint demand might be down slightly in 2027.

Positive Updates

Record Quarterly Results

Third-quarter net sales reached a record $874.3 million, up 23.3% year-over-year; gross billings increased 19.4% to $1.3 billion; and gross profit grew 16.7% to a record $161.9 million.

Negative Updates

Gross Margin Decline

Company-wide gross margin declined 110 basis points to 18.5%, driven by customer mix, large project rollouts, a lower contribution of netted-down revenue, pricing pressures and supply chain conditions. Management said approximately half of the decline reflected software accounting and the other half reflected customer or product mix, including lower-margin endpoint devices sold to large customers.

Company Guidance

For Q4, Connection said it expects business to be down 3% or 4% sequentially from Q3 to Q4, with SG&A tracking that as well; the company expects to continue to outperform the U.S. IT market by 200 basis points this year. For 2027, it expects AI to continue to drive endpoint demand, but endpoint demand might be down slightly in '27 from '26, while demand for on-prem, for Agentic server, for networking, security and software will continue to be pretty solid.

PC Connection Risk Analysis

PC Connection disclosed 28 risk factors in its most recent earnings report. PC Connection reported the most risks in the "Tech & Innovation" category.

Tech & Innovation - Risks related to the company’s reliance on technology and ability to make innovative products

Latest Risks Added

1 New Risk

1.In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial position, and results of operations. Risk factors which could cause actual results to differ materially from those suggested by forward-looking statements include but are not limited to those discussed or identified in this document, in our other public filings with the SEC, and those contained in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.Q2, 2026

PC Connection Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:PCC against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLMB	78Outperform	$749.68M	32.60	19.25%	0.40%	24.23%	10.53%
ARW	74Outperform	$10.34B	13.22	12.14%	―	26.05%	76.95%
PLUS	71Outperform	$2.33B	18.68	11.84%	1.16%	15.01%	11.40%
SCSC	71Outperform	$1.15B	15.38	8.66%	―	6.09%	21.23%
SNX	63Neutral	$17.73B	13.79	14.94%	0.84%	24.10%	77.90%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

DE:PCC and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:PCC	Pc Connection	75.50	26.07	52.74%
ARW	Arrow Electronics, Inc.	208.76	95.93	85.02%
PLUS	Eplus Inc	89.85	16.69	22.81%
SCSC	ScanSource Inc	56.74	14.87	35.51%
SNX	TD SYNNEX Corporation	228.04	76.26	50.25%
CLMB	Climb Global Solutions, Inc.	42.38	14.21	50.47%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

PC Connection AI Stock Analysis